IR Notes

The European Parliament on 11 November adopted a resolution following the consultation launched on 19 March by the Directorate-General for Mobility and Transport of the European Commission concerning a future raft of measures for the aviation sector. The so-called “aviation package” is due to be passed by the Commission by the end of the year. In this resolution, which was adopted with a large majority, the MEPs showed they were listening to the European social partners. The resolution calls on the Commission to “prevent unfair competition more effectively, ensure reciprocity and eliminate unfair practices, including subsidies and state aid awarded to airlines from certain third countries “. To eliminate certain social dumping practices, the resolution recommends 1/ “pinning down the concept of ‘principal place of business’ so that the operating licence is granted by a state if the volume of air transport therein is substantial”; and 2/ “in the context of the coordination of social security systems, alignment of the definition of ‘Home Base’ as per Regulation (EU) No. 83/2014 and Regulation (EU) No. 465/2012.” In addition, it is necessary to “clarify the situation of aircrew that have multiple home bases”. In other respects, the resolution highlights the difficulties of implementing directive 2008/104 concerning temporary agency work in the sector, requesting that the Commission find a remedy. Finally, the MEPs are “concerned about the increase in socially problematic business practices such as ‘flags of convenience’ and the use of atypical forms of employment such as bogus self-employment, pay-to-fly schemes and zero-hours contracts, which may have potential safety implications”. This remark refers particularly to the report commissioned by the European social partners of the civil aviation sector that had underscored the potential risk linked to increased use of these forms of atypical employment, which certain companies were placing at the heart of their business model. In a press release, the organisation representing the main European airlines (the Association of European Airlines – AEA) described the resolution as a “step in the right direction”.

• Transatlantic partnership: The European Commission on 6 November published its proposal for a chapter on trade and sustainable development, in particular with regard to labour and environmental protection, as part of the ongoing trade negotiations between the European Union and the United States on the Transatlantic Trade and Investment Partnership (TTIP) (see press release). The aim, according to the Commission, is to ensure that high standards for labour and environment are upheld both in the EU and the US. The chapter refers in particular to the ILO core labour standards, which include freedom of association and the right to collective bargaining.


• Steel: The Competitiveness Council has taken stock of the serious challenges currently faced by the European steel industry (see press release). A special high-level conference bringing together the stakeholders and involving the social partners will be scheduled in the near future to follow up the preliminary measures announced.


• Evaluation of the directive on European works councils: The European Commission on 16 November convened a meeting of the members of the group of experts on the implementation of directive 2009/38 on European works councils, as well as the eight representatives of the European social partners. The meeting was organised in connection with the directive evaluation process, at whose conclusion the Commission will, in 2016, publish a report indicating whether or not the directive needs to be recast. The consulting firm ICF presented the preliminary results of a study requested by the Commission covering several points, including the coherence of the directive with other European instruments; the effects of the directive on the creation and functioning of European works councils; the effectiveness of information and consultation rights, as well as the inevitable evaluation of costs and benefits generated by the directive. The report states that 58 EWCs have been created under the new directive, primarily in groups having their head office in France (19%), Sweden (12%) and the United States (9%). Eurofound also published its analysis of the articulation of information and consultation procedures at national and European levels.
  > Recently added documents: First phase consultation of social partners on possible action addressing the challenges of work-life balance faced by working parents and caregivers.

• Clarifications on the scope of the directive on collective dismissals: The Court of Justice of the European Union has delivered a judgement (CJEU, 11 November 2015, case C-422/14, Christian Pujante Rivera) in a case where it was asked to clarify which instances of terminated employment contracts should be taken into account when calculating the employee thresholds warranting compliance with the protections afforded by directive 98/59 on collective redundancies, in particular the right to an information and consultation procedure for the employees concerned. Under the legislation of some countries, a minimum number of redundancies must be announced within a 90-day period in order to trigger such a procedure. Apart from the redundancies, the Court was also asked whether the case of an employee who left the company on the basis of an agreement made with the employer following her refusal to accept a major change to her employment contract (a 25% cut in pay) should also be taken into account. On this point, the Court examined whether such a termination constituted a redundancy stricto sensu or whether it was merely “assimilated” to a redundancy. This distinction has an important practical significance since it is the “concept of ‘redundancy’ in the first sub-paragraph of Article 1(1)(a) of directive 98/59” that “directly determines the scope of the protection and the rights conferred on workers under that directive”. The Court noted that “the remuneration of the worker in question was reduced unilaterally by the employer for economic and production reasons and, as the person concerned did not accept the reduction, that resulted in the termination of the employment contract and the payment of damages calculated on the same basis as damages awarded in the case of unfair dismissal”. The Court therefore found that “any national legislative provision or any interpretation of that concept to the effect that (…) the termination of an employment contract is not a ‘redundancy’ for the purpose of directive 98/59 would alter the scope of the directive and thus deprive it of its full effect”. Consequently, as indicated by the Advocate General, “the same protection for workers is to be conferred as that conferred on a redundancy which the employer effects expressly”. This judgement will have consequences in countries whose legislation allows employment contracts to be terminated by mutual agreement between the employer and the employee.

• New government initiative to reduce the cost of labour: For the second time in the space of a few months, the government has overturned its plans, deciding not to go ahead with the planned reduction in remuneration for working on Sundays and overtime hours. It intends to replace these measures by a 30% reduction in the holiday bonus of 50 per cent paid in conjunction with annual leave (for paid leave of six weeks, workers receive nine weeks’ salary). However, as this bonus is set by collective agreement, the government will first have to adopt a legislative measure to turn the collectively-agreed bonus into a statutory enhancement – which will oblige certain companies not offering a holiday bonus to provide one – before the 30% reduction can be applied. The aim is to lower labour costs by 5%. Realising that it could not act against the autonomy of the social partners to set wages, the government has suggested that the social partners negotiate their own package of measures to arrive at the same result. If they succeed, it will withdraw its plans (see letter from the Finnish trade unions, in English).

• Towards a reform of the labour market: On 4 November the government presented the outline of its bill to reform the French labour code. The government plans to begin a consultation with the social partners and to assign the “mission” of drawing up the “fundamental principles of labour law” to a group of “wise men” (judges and academics). The bill will be presented as early as January 2016, with a view to adoption by parliament before the summer. The code is likely to comprise three levels: 1/ “Public social order” provisions, to which no exemption can be agreed; 2/ Topics open to negotiation in industry or company-level collective agreements; 3/ Provisions applicable in the absence of an industry or company-level agreement. The aim is to enhance the scope for collective bargaining, without however undermining the hierarchy of norms. Once the law has been passed, a commission will be asked to rewrite the code with a view to its taking effect in the first half of 2018. In the meantime, the section of the code devoted to working hours, rest time and leave arrangements will already be rewritten in the course of drafting the bill (see press release and press kit).

• Reform of workplace relations structures takes effect: The reform of employment rights structures brought about by the Workplace Relations Act entered force at the beginning of October. It replaces five different bodies by the Workplace Relations Commission in the first instance, and the Labour Court as the single appeals body. The role of the Workplace Relations Commission also includes the promotion of good industrial relations and giving guidance on compliance with codes of practice. Employees can refer disputes to the Commission via its website by filling in a workplace relations complaint form.

• Trade union analysis reveals top pay gender gap : Analysis by the Trades Union Congress has found that the gender gap for high earners in the UK has reached some 55%, compared with 19% for the workforce as a whole and 9% for full-time employees. Some progress has been made recently on a voluntary basis on raising female representation women on company boards: this now stands at some 20% for firms in the FT-250 listing, with a new objective of 33% by 2020. However, salary disparities for senior professionals and managers remain very wide, according to the TUC. While the top 2% of male earners bring in £117,352 a year, the top 2% of women earn an average of £75,745.


• Gender pay gap : the UK government has been consulting on further steps to close the gender pay gap, which is especially marked in sectors such as finance and some professions. The government proposes that employers with at least 250 employees must publish information about the pay of their male and female employees with consultation on the precise metrics to be used and sanctions for non-compliance. Regulations are expected during the first half of 2016.

• Sanofi: The European works council of the pharmaceuticals group Sanofi met on 9-10 November to discuss plans unveiled on 6 November by the group’s management concerning the animal health activities concentrated within its Merial subsidiary and the production, distribution and commercialisation of generic medicines. For these two activities, the management has launched a review focusing on four options: sale, creation of a joint venture, IPO, or to remain within the group. The EWC secretary, Stéphane Galiné (CFDT), contacted the expert usually consulted by the group works council in France and the EWC, the consultancy firm Syndex, to evaluate the merits of initiating an expert report procedure. “An examination of our generics activities was judged to take priority,” Stéphane Galiné explains, “insofar as, apart from two sites entirely dedicated to generics manufacture, the rest of production is spread across a large number of sites, and no-one is able to identify exactly the volumes of generic medicines being produced at each location, or the impact in terms of activity and employment in the event of a sale. Furthermore, the generics portfolio needs to be defined in detail”. At the meeting on 10 November, which was also attended by management, the EWC voted unanimously in favour of an expert report on this matter. Responsibility for this will lie with management, in line with the terms of the EWC installation agreement.

• H&M: The management of the fashion retailer H&M (132,000 employees), the IndustriAll Global Union international trade union federation and the Swedish trade union federation IF Metall on 3 November signed an innovative global framework agreement that “marks a new level of commitment to fundamental rights of workers across H&M’s supply chain”. Indeed, according to IndustriAll, the agreement covers “1.6 million garment workers” employed by H&M’s subcontractors and suppliers. The accord is far removed from the old style of global framework agreements, in which companies committed themselves only to a small number of ILO conventions. In fact, it covers more than 30 ILO conventions, from those on the freedom of association and the right to collective bargaining to those on working hours and health and safety (see IndustriAll and H&M press releases).

• Metro: The UNI Global Union international trade union federation convened a meeting of the Global Union Alliance of the German Metro group on 3-4 November in Berlin. The trade unionists reported a deterioration in social dialogue in several countries, with local management failing to respect the global framework agreement concluded in 2013 between Metro and IndustriAll (see press release).

Collective bargaining systems in the EU: The Foundation for the Improvement of Living and Working Conditions (Eurofound) has published an extremely comprehensive report on the evolution of collective bargaining systems from the end of the 1990s. It goes on to highlight the main related trends, such as the decentralisation of collective bargaining (see the report “Collective bargaining in Europe in the 21st century” and its executive summary, in English).

• Changes occurring in 2014 in the member states: The Foundation for the Improvement of Living and Working Conditions (Eurofound) has also delivered its annual review of changes that have taken place in the member states in eight chapters (employment relations, collective actions, wage-setting, health and safety etc.). This summary (“Developments in working life in Europe: EurWORK annual review 2014“).